The Advertising Club Bangalore conducted a survey of 70 agency heads covering creative, media, research and brand consulting and 22 CMOs from FMCG, Retail, Durables and Services to evaluate the impact of COVID-19 and the ensuing lockdown on their future business projections.
Drop in revenue
The last few weeks have seen radical changes in the way businesses function, with many of them resorting to salary cuts, furloughs and even layoffs in an effort to keep themselves afloat.
The survey showed a drop in revenue and advertising spend levels of between 10 to 20% across agencies and industries.
Sam Balsara, founder, chairman and managing director of Madison World and Madison Communications, said, “Advertising is one part of the overall Indian Industry that is critical. The major challenge before the industry is how to revive demand.”
He added, “The Government should allow amortization of advertising expenditure and if possible, media should allow extended periods of credit. These two enablers would considerably help get the Indian economy back on track, sooner than later.”
Time for recovery
Most of the respondents believe that it will take at least 6 to 12 months for the situation to normalise and spends to go up again, though perhaps not to the same levels, pre-Covid.
Srinivasan Swamy, chairman and managing director, R K Swamy BBDO, believes that there will have to be significant cost cutting and expenditure control. “Three changes I foresee are clients will accept less travel and more video/audio call meetings. Staff costs could have a higher variable component and marketers will look for a sharper nail, not a large hammer. Ideas will be more important than a budget that backs it.”
Ramesh Narayan, area director of APAC, IAA, added that whatever shape the recovery takes, the advertising industry will have to cut as many costs, like travel and real estate, as possible, in order to preserve jobs and their people.
WFH: the new normal
The Advertising Industry which has largely been a face-forward industry has to now figure out a way to work remotely.
“This massive work-from-home experiment, imposed on us to fight this severe pandemic, has certainly unleashed the immense gift of agility that was sitting within our modern workforce.
It has definitely introduced great flexibility, virtual mobility, and dynamic collaboration into the market. Remote work software like mobile work tools and virtual reality conferencing are becoming the preferred mode of communication now, even over face-to-face meetings, other than those deemed critical.
Fresh strategies are being explored and executed to sustain and nurture the industry’s creative output and digital is now being looked upon as the new form for survival. Frankly, the situation has brought us together like never before and that is going to stay.”
Subhash Kamath, CEO and Managing Partner, BBH India, says, “The big opportunity for the industry is learning how to make technology work more efficiently for us. While WFH seems to be the current situation, I believe it is far from temporary. Working out of different locations and collaborating on ideas online will be the future way to go, post COVID as well.”
Some light at the end
Increased media consumption with people spending more time at home will profit industries like television and gaming which will in turn impact advertising agency spends.
Creative excellence during these times
Josy Paul, chairman and CCO, BBDO India, says, “We’ll see refreshing changes in the creative workspace. It’ll most likely be a hybrid model – of people working from home and people working from the office. This dual way of work-from-home-work-from-office model will disrupt conventional chemistry and influence new ways of connecting, thinking, ideating and creating. We are already seeing this play out during the lockdown. But once the restrictions are lifted, we’ll witness the collision of new and old ways. The changing rules of conduct will lead to new and creative ways to execute ideas, scripts, audio and digital content and on-ground activation.”
Paul adds, “The new challenge is the opportunity. The constraint is freedom. In the process, we will find another surprising side to ourselves. Like when we go on an adventure trek and we discover new muscles and strength that we never knew we had. Human ingenuity will come into play. There’s going to be a lot of positive rearrangement! We can’t fully write this. It will write to us. So let uswait and watch.”
The best brands know that they are ultimately selling a feeling and the emotional connect that a brand has with its customers is the biggest value of all. According to Bobby Pawar, chairman and CCO, Havas India, “The principles that guide the work still hold true. If your idea is not interesting nobody will be interested in it. People buy with their hearts and rationalize it with their heads. A brand’s values are just as important as its value for money.”
Laeeq Ali, president, The Advertising Club Bangalore and co-founder, Bloombox Brands & Origami Creative says, “While there is a lot of talk on how consumer preferences and behavior are going to change, it is very clear that the advertising agencies have a critical role to bring back consumer confidence as well as move the market at large into a positive frame of mind.”